Tennessee, Virginia AGs file lawsuit against NCAA over restrictions on NIL for recruiting

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The states of Tennessee and Virginia filed a lawsuit against the NCAA in a federal court on Wednesday, challenging the organization’s ban on using name, image and likeness (NIL) in recruiting.
The suit comes after news broke Tuesday that the NCAA was investigating the university and Spyre Sports — a collective unofficially associated with the University of Tennessee — and its activity in recruiting, specifically around Volunteers quarterback Nico Iamaleava.
Tennessee and Virginia are seeking a temporary restraining order barring the NCAA from enforcing its NIL-recruiting ban or taking any other action to prevent prospective college athletes and transfer candidates from engaging in meaningful NIL discussions prior to enrollment.
“Student-athletes are entitled to rules that are clear and rules that are fair,” said Tennessee Attorney General Jonathan Skrmetti. “College sports wouldn’t exist without college athletes, and those students shouldn’t be left behind while everybody else involved prospers. The NCAA’s restraints on prospective students’ ability to meaningfully negotiate NIL deals violate federal antitrust law. Only Congress has the power to impose such limits.”
The suit pointed to the Supreme Court’s 9-0 decision on Alston v. NCAA in 2021, which ruled that the NCAA can’t limit education-related payments to student-athletes.
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“Those rules — especially the restrictions on compensating college athletes — are in fact “subject to the Sherman Act,” “subject to the rule of reason,” and often plainly illegal,” the suit reads.
The suit echoes many of the sentiments expressed by UT chancellor Donde Plowman in a letter to NCAA president Charlie Baker sent on Monday and points to “the NCAA’s newfound interest in NIL enforcement actions” as a reason why the issues in the suit are urgent.
In her letter on Monday, Plowman referenced the possibility of Tennessee facing a “lack of institutional control” charge, the most serious charge against a university and its athletic programs.
Tennessee athletic director Danny White and Spyre co-founder James Clawson are both declarants in the suit. In a statement from legal representative Tom Mars, Spyre denied that it had induced Iamaleava to attend Tennessee.
“The agreement required Spyre to protect the value of Nico’s NIL rights and specifically stated that “nothing in [the] agreement constitutes any form of inducement to (Iamaleava) to enroll at any school and/or join any athletic team,” the statement read.
The University of Tennessee has been nothing but forthcoming with the NCAA, and I thank Chancellor Donde Plowman for taking a stand on behalf of all universities and student athletes. pic.twitter.com/UEiI5tM2Q5 — Gov. Bill Lee (@GovBillLee) January 31, 2024
The NCAA recently opened an investigation of NIL activity in recruiting around Florida and quarterback Jaden Rashada, and Florida State was recently penalized by the governing body after a coach gave a transfer prospect a ride to a meeting with a collective.
The New York Times reported on Tuesday that one of the issues raised in the NCAA’s investigation is the use of a private plane to allow Iamaleava to travel to Tennessee’s campus when he was still in high school.
The suit seeks to deregulate the process of athletes signing NIL deals and loosen rules surrounding NIL activity.
It also comes on the heels of a multi-state lawsuit challenging the NCAA’s transfer eligibility rules, specifically in regard to multi-time transfers being required to sit out a year-in-residence before returning to competition. The U.S. Department of Justice recently joined the suit, which initially secured a TRO that granted immediate eligibility in December to any NCAA college athletes who were unable to play due to the multi-time transfer year-in-residency requirement. That decision led to a preliminary junction agreement between the NCAA, the plaintiffs and the court that granted immediate eligibility to athletes through the 2023-24 academic calendar, as well as any fall 2024-25 athletes who become multi-time transfers before the end of the 2023-24 calendar. For example, if a multi-time transfer in football were to transfer to a new school before the end of the 2023-24 school year, they would be immediately eligible to compete at the new school for the 2024 football season.
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(Photo: Bryan Lynn / Icon Sportswire via Getty Images)

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